Every year, it seems, we’re treated to news coverage of surveys detailing various benefit packages and how those packages attract or retain quality talent. (Boxed.com will even pay for employee’s weddings, up to $20,000!) Benefits are great – let’s face it, weddings are expensive, and if you’re thinking about getting married soon, that Boxed perk looks appealing.
But we go to work in order to earn a salary, and salaries drive careers — it’s as simple as that. Among all of the factors that comprise a job opportunity, salary remains comfortably at the top of the list. Higher salaries are naturally more desirable thus logically a goal. Employees chase money; the more talented employees have a better chance of a successful pursuit.
And, at least in the tech world, the money chases the talent as well.
Paysa’s CompanyRank algorithm uses machine learning to assess the quality of technical talent at thousands of tech companies over time. A company’s rank at, say, the most recent month (December 2015 at the moment) offers a snapshot to the company’s current pool of talent.
As it turns out, these rankings can have strong implications about the company’s financial performance.
It appears that a consistently increasing/high CompanyRank is a legitimate predictor of an increase in a company’s stock price. To support this claim, we can analyze the CompanyRank score and adjusted closing price over the last 10-15 years for several public companies in the ranking algorithm’s top 20 spots. Below are graphs for Amazon (rank 10), Apple (rank 18), and Netflix (rank 20).
Each of these three examples suggests a strong relationship between ranks and stocks. There is some degree of variation in the response — Apple’s stock followed the increase in ranks relatively quickly, whereas Amazon and Netflix’s stock prices were more reluctant — but the correlation is palpable. This is surprising, as we might have expected the talent to seek out the companies with market success rather than the other way around.
Even for companies with lower CompanyRanks, such as Walmart, which currently clocks in at #559, there is evidence of the rank’s predictive abilities:
In other words, it looks like money can chase people, too.
Keeping an eye out for the companies whose ranks are on the rise could very well result in the payout you’ve been waiting for. On the other hand, if your company’s stock prices are tumbling, be sure to persuade your prized talent from dusting off their resumes. People will continue chasing the money, and for the top talent], as well as investors, the chase has never been easier.
By Branden Olson